Intel (INTC), ASML (ASML) Enter Deal to Accelerate Next-Gen Manufacturing Technologies; Intel to Buy 10% of ASML
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Intel (Nasdaq: INTC) today announced it has entered into a series of agreements with ASML Holding N.V. (Nasdaq: ASML) intended to accelerate the development of 450-millimeter (mm) wafer technology and extreme ultra-violet (EUV) lithography totaling €3.3 billion (approximately $4.1 billion). The objective is to shorten the schedule for deploying the lithography equipment supporting these technologies by as much as two years, resulting in significant cost savings and other productivity improvements for semiconductor manufacturers.
To achieve this, Intel is participating in a multi-party development program that includes a cash contribution by Intel to fund relevant ASML research and development (R&D) efforts as well as equity investments in ASML. The first phase of this program consists of Intel committing to R&D funding of €553 million (approximately $680 million) to assist ASML in accelerating the development and delivery of 450-mm manufacturing tools, as well as an equity investment of €1.7 billion (approximately $2.1 billion) for approximately 10 percent of ASML’s pre-transaction issued shares. Intel will record the R&D investment as a combination of R&D expense and pre-payments on future tool deliveries.
The second phase of the program is conditioned upon ASML shareholder approval. It includes an additional commitment by Intel of R&D funding of €276 million (approximately $340 million) in ASML focused on accelerating EUV, as well as an equity investment of €838 million (approximately $1.0 billion) for an additional 5 percent of ASML post-transaction issued shares.
Intel will then hold a total of 15 percent of ASML’s issued shares. The total equity investment will be €2.5 billion (approximately $3.1 billion). As part of these agreements, Intel is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML.
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To achieve this, Intel is participating in a multi-party development program that includes a cash contribution by Intel to fund relevant ASML research and development (R&D) efforts as well as equity investments in ASML. The first phase of this program consists of Intel committing to R&D funding of €553 million (approximately $680 million) to assist ASML in accelerating the development and delivery of 450-mm manufacturing tools, as well as an equity investment of €1.7 billion (approximately $2.1 billion) for approximately 10 percent of ASML’s pre-transaction issued shares. Intel will record the R&D investment as a combination of R&D expense and pre-payments on future tool deliveries.
The second phase of the program is conditioned upon ASML shareholder approval. It includes an additional commitment by Intel of R&D funding of €276 million (approximately $340 million) in ASML focused on accelerating EUV, as well as an equity investment of €838 million (approximately $1.0 billion) for an additional 5 percent of ASML post-transaction issued shares.
Intel will then hold a total of 15 percent of ASML’s issued shares. The total equity investment will be €2.5 billion (approximately $3.1 billion). As part of these agreements, Intel is also committing to advanced purchase orders for 450-mm and EUV development and production tools from ASML.
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